Correlation Between China Construction and Sinochem International
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By analyzing existing cross correlation between China Construction Bank and Sinochem International Corp, you can compare the effects of market volatilities on China Construction and Sinochem International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Construction with a short position of Sinochem International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Sinochem International.
Diversification Opportunities for China Construction and Sinochem International
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Sinochem is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Sinochem International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinochem International and China Construction is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Construction Bank are associated (or correlated) with Sinochem International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinochem International has no effect on the direction of China Construction i.e., China Construction and Sinochem International go up and down completely randomly.
Pair Corralation between China Construction and Sinochem International
Assuming the 90 days trading horizon China Construction is expected to generate 2.18 times less return on investment than Sinochem International. But when comparing it to its historical volatility, China Construction Bank is 1.96 times less risky than Sinochem International. It trades about 0.07 of its potential returns per unit of risk. Sinochem International Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 423.00 in Sinochem International Corp on September 5, 2024 and sell it today you would earn a total of 12.00 from holding Sinochem International Corp or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Sinochem International Corp
Performance |
| Timeline |
| China Construction Bank |
| Sinochem International |
China Construction and Sinochem International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Sinochem International
The main advantage of trading using opposite China Construction and Sinochem International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Sinochem International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sinochem International will offset losses from the drop in Sinochem International's long position.| China Construction vs. Beijing Sanyuan Foods | China Construction vs. By health | China Construction vs. Everjoy Health Group | China Construction vs. Shandong Huifa Foodstuff |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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